A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Eduard Kokoity, President of the Republic of South Ossetia took place today at the Company’s Headquarters.

The parties discussed the reconstruction progress with South Ossetia’s gas supply facilities ruined as a result of armed hostilities. Special emphasis was placed on the construction of a new gas pipeline from North Ossetia to South Ossetia and the arrangement of natural gas supplies to the Republic.

The meeting particularly highlighted that Gazprom had fully reconstructed the gas distribution networks and gas distribution station in Tskhinval. The parties gave a high evaluation to the work done that resulted in the renewal of gas supplies to the city’s consumers this January.

Background:

Since August 2008 Gazprom has been taking actions aimed at reconstructing gas supply facilities in the Republic of South Ossetia ruined as a result of armed hostilities. Over this period a gas distribution station was constructed anew and gas distribution networks were fully reconstructed in Tskhinval. On January 24, 2009 natural gas supply to consumers was resumed. Gas is delivered via the Agara – Tskhinval gas lateral from the Tbilisi – Kutaisi gas trunkline. As planned, in the first half of 2009 the city’s consumers will receive 6 million cubic meters of natural gas.

During reconstruction works consumers of Tskhinval and a number of other population centers of South Ossetia received liquefied petroleum gas (LPG) from Gazprom. Some consumers of the city and other population centers of the Republic (in particular, the cities of Dzhava and Znaur) have been receiving LPG up to the present day.

Construction of a new gas pipeline from the settlement of Dzuarikau (Republic of North Ossetia – Alania) to Tskhinval (Republic of South Ossetia) was launched in December 2006.

The gas pipeline from Dzuarikau to the Kudar Pass (92.8 km) is being built by Gazprom, while NGK Itera is constructing the pipeline from the Kudar Pass across the Republic of South Ossetia to Tskhinval (70.2 km).

The gas pipeline is planned to be completed in the third quarter of 2009.

Tskhinval is the only population center of South Ossetia supplied with gas. At present, gas supplies to the city are being executed by Itera Georgia.